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The Victorian Government CSIF Grant is a leading example of how government grants can serve the industry.

Recently, the industry has been critical of government funds and grants that are not only confusing and difficult for small businesses to apply, but which are focused heavily on minimal risk, resulting in companies that do not need the added investment getting that additional government support over others.

However, to the surprise of everyone, sometimes governments do get it right.

In 2021-22 the Victorian State Government created the Commercial Sector Innovation Fund ZEV Grant, a grant that our very own Auto Innovation Centre (AIC) received.

While the AIC had several measurable targets it was required to achieve, programs designed for in-kind contributions allowed for the AIC to collaborate with a number of industry partners to create and speed up projects that otherwise would have been left on the back burner until there was a commercial incentive to do so.

The projects ranged from industry training and education to modifications and aftermarket manufacturing and industry awareness.

Directly and indirectly, these projects have benefited everyone in the automotive aftermarket industry with joint projects including Industry research and initiatives at the 2024 Aftermarket Expo coming as a direct result of the Victorian Government Grant.

One of the key strengths of this grant was its focus on creating collaborative effort. By requiring industry partners to contribute either financially or through in-kind support, the grant created a sense of shared ownership.

Businesses weren’t just receiving handouts; they were active participants in the success of the projects.
This type of model creates a snowball effect, where government funding can attract additional private-sector investment, leading to more innovation and faster development timelines.

When thinking about government grants it is vital that risk is shared, sometimes the net benefit will be able to achieve a tangible Return on Investment, but in many cases, it won’t.

It should also be said that for many businesses it is unlikely that an accurate return on investment will be able to be given before the project’s commencement. This is more evident when we are dealing with technology that is still in its infancy.

The level of return on these projects will come from market demand into the future, however, what most governments fail to see is that we as an industry will be the ones that contribute to market demand.
There is still a level of skepticism around EV infrastructure, that goes beyond a community charging station – consumers want to know if they can service, repair and modify these vehicles with the same convenience as an ICE vehicle.

While our members are making significant strides, at a point the economic arguments surrounding market share will come into play. 

Too often, grants are designed to minimise risk for the government, placing the onus of success almost entirely on businesses.

This can create a scenario where only the safest, least innovative projects get funding, or worse, where companies that need support the most are shut out. But when dealing with new technology we will never have a risk-free approach.

The AIC EV grant embraced a reasonable level of risk in a way that encouraged innovation and collaboration while ensuring that both the government and industry had something at stake. This is important while EVs still make up less than two percent of the total Car Parc.

As we go forward to a future that is still dominated by government announcements on the transition to net zero and with major government commitments such as the Future Made in Australia Fund, the need for simple and easy grants that allow all businesses to benefit has never been clearer.
After all, these grants are designed to help State and Federal Governments meet their own mandated emissions targets.

Without industry support and the use of these grants, the government will be travelling the wrong way down a one-way road.

With billions of dollars of funding available, it is now more important than ever for our industry to advocate for grants that follow the Victorian model.

By voicing our needs and promoting successful models like the CSIF ZEV Grant, we can help shape the future of government funding to better serve the automotive aftermarket industry in this transition.
The Victorian Government CSIF Grant serves as a blueprint for how to do this effectively. It shows that when risk is shared between government and industry, and when collaboration is incentivised, we can achieve great things.

This is the kind of balanced approach that should be at the heart of all future government grants if we want to support a thriving, innovative automotive industry to reach the government’s own targets.

If you would like to offer your thoughts on this subject, please email advocacy@aaaa.com.au